Introduction
Alarm bells have been ringing over the recent decline in foreign currency inflows to Mexico, specifically through remittances. The trend of decreasing remittances has been observed since September 2025, following a prolonged period of record-breaking annual increases over the past decade.
The Significance of Remittances in Mexico
Remittances have become a crucial source of foreign currency for Mexico, surpassing oil as the primary source in 2020. In fact, former President Andrés Manuel López Obrador once referred to them as “the blessed remittances.” However, the recent downturn in remittances has raised concerns about their future impact on Mexico’s economy.
Historical Context and Importance
- For nearly a decade, remittances have consistently broken annual records, growing at an impressive rate.
- In 2014, remittances reached a historical high of $33.53 billion, surpassing the previous peak set in 2012.
- By 2024, remittances had grown by approximately 93%, reaching $64.745 billion, making them the leading source of foreign currency.
Recent Developments and Data
According to Banco de México, in September 2025, remittances to Mexico amounted to $5.214 billion, marking a 2.7% annual decrease and a 6.5% drop compared to August.
- This decline has persisted for six consecutive months, with the downward trend beginning in April.
- In the first nine months of 2025, Mexico has received $45.681 billion in remittances, which is 5.5% less than the same period in 2024.
Economic Impact and Consequences
Remittances have played a vital role in supporting consumption, macroeconomic stability, and poverty reduction in Mexico. They account for around 39% of the country’s primary foreign exchange sources, surpassing tourism, foreign direct investment, and oil.
- In 2024, remittances contributed approximately 3.5% to Mexico’s GDP and represented nearly 40% of its primary foreign exchange sources.
- Despite an estimated 5.8% decline in 2025, remittances remain the second-largest source of foreign currency, following agroexportations.
Potential Causes of the Decline
Several factors may have contributed to the recent decline in remittances:
- Changes in U.S. President Donald Trump’s policies
- Increased competition in the U.S. labor market due to migrants accepting lower wages
- Growing migratory pressures
Experts warn that this downward trend might worsen, urging the Mexican government to take necessary precautions.
Key Questions and Answers
- What are remittances? Remittances are funds sent by migrant workers to their families in their home countries.
- Why are remittances important to Mexico’s economy? Remittances contribute significantly to consumption, macroeconomic stability, and poverty reduction in Mexico.
- What has been the trend of remittances to Mexico? For nearly a decade, remittances have consistently broken annual records. However, since September 2025, there has been a six-month decline.
- What factors might have caused the recent decline in remittances? Potential causes include changes in U.S. policies, increased labor market competition, and growing migratory pressures.
